There has been a great deal of interest in Nigeria’s ‘e-wallet’. What are the key elements and what made you decide that this system was needed?
We decided to implement the e-wallet system to reduce the Government’s direct involvement in the procurement and distribution of agro-inputs. This joint initiative between the Central Bank of Nigeria and the Federal Ministry of Agriculture and Rural Development ensures that agro-inputs as well as key extension messages reach the farmers in a fast and transparent way. Key elements include modules on farmer registration, transaction management, agro-dealer lending, and third party auditing. By putting the power in farmers’ hands, vouchers for subsidised inputs; seed and fertiliser are received on their mobile phones - or ‘e-wallets’ - which they use to buy inputs directly from the agro-dealers.
Since its launch, what have been the major benefits for farmers and the Government? What will be the long term impact of the e-wallet on Nigeria’s agricultural sector?
Since 2011, we have reached about 20 million smallholder farmers. Fertiliser companies have sold €100 million and seed companies €10 million worth of inputs. Banks have lent €20 million to agro-dealers and the default rate has been 0%. We now have an up-to-date register with complete profiles of more than 15 million farmers. As a nation, we have produced an additional 21 million tonnes of food and reduced the food import bill. According to the National Bureau of Statistics, food imports declined from €6.3 billion in 2009 to €4.11 billion in 2013, and continue to decline. Our national import bill for rice has been reduced by 60%. We have successfully brought transparency, accountability and structure to the input distribution system in Nigeria and we can track whatever is going on within the system. It has also restored trust between the Government and farmers. Major local and international investors are investing in this new agriculture sector.
The long term impact of the e-wallet system is the integration of all the elements of our national agricultural system: from production to consumption. Attaining our national food security and economic development goals is no longer unreachable. Agriculture has regained its rightful place as the major creator of jobs and increased incomes. We can reduce our dependency on oil wealth because we also have ‘soil wealth’.
What have been the challenges? Is there need for continued government intervention or will farmers be willing to pay for future services?
Changing behaviour that has been entrenched over 40 years was not easy but we have succeeded in convincing farmers and agro-dealers, among others, to adopt this transparent way of doing business. The second challenge was infrastructure. We need a more robust telecommunication, road and rail infrastructure. Our investments over the past 3 years are now bearing fruit. For example, more farmers have adopted mobile telephone technology, we have fixed major roads and we have increased access to markets. We plan to upgrade the e-wallet by embedding a micro-chip to serve as an electronic identification bank card as part of the Nigerian Agricultural Payments Initiative.
What advice would you give to other African governments who are considering adopting the e-wallet?
Nigeria is the first African country to launch an electronic wallet system for the delivery of subsidised inputs to farmers. Our advice is simple; visit Nigeria to learn from our experience if you want to implement your programme at a faster pace. There is no need to replicate our mistakes.
This interview will be published as part of the upcoming June/July Spore magazine.